Recently, Jiangsu Xinhua Semiconductor Technology Co., Ltd. (hereinafter referred to as &#34;Xinhua Technology&#34;), a leading domestic electronic-grade polysilicon company, has had its IPO on the Sci-Tech Innovation Board accepted by the Shanghai Stock Exchange, becoming the first IPO project accepted in the Year of the Horse.
Boosted by the high prosperity of the semiconductor industry, Xinhua Technology's performance has grown significantly, with revenue and net profit attributable to the parent company reaching 1.336 billion yuan and 123 million yuan respectively in the first three quarters of 2025, both exceeding the performance levels for the entire year of 2024.
In this IPO, Xinhua Technology plans to raise 1.32 billion yuan to invest in multiple projects, including a 10,000 tons/year high-purity electronic-grade polysilicon industrial cluster and 1,500 tons/year ultra-high-purity polysilicon.
However, behind this seemingly well-timed IPO amid the expansion of wafer production lies a mix of capital withdrawal and concerns over the lack of transparency in information disclosure.
On the eve of the IPO, Xinhua Technology's biggest &#34;backer,&#34; the GCL Group, which has supported it for ten years, is troubled by huge losses in its photovoltaic main business and the backlash from a betting agreement, cashing out over 1.4 billion yuan in a &#34;clearance-style&#34; exit.
At a time when expansion is leading to rising debt, Xinhua Technology has played a &#34;word game&#34; in its prospectus, focusing on the &#34;parent company caliber&#34; debt-to-asset ratio situation, creating a superficial appearance of a declining debt-to-asset ratio to the outside world.
Whether Xinhua Technology can successfully sprint to its listing is under scrutiny.
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<h2>Ten Years of &#34;Support&#34; Departing in Silence</h2>
Looking back at the growth history of Xinhua Technology, it has been marked by the &#34;GCL Group&#34; since its inception.
In 2015, GCL-Poly Energy Holdings Limited, controlled by GCL Group, and the National Integrated Circuit Industry Investment Fund jointly established Xinhua Technology.
Among them, GCL Group held a dominant position with a shareholding ratio of 50.98%.
This luxurious start with &#34;industry leader + national team&#34; dual shareholders laid the foundation for Xinhua Technology's entry into the electronic-grade polysilicon field.
To promote the development of Xinhua Technology, GCL Group has been &#34;investing money and effort.&#34;
The first domestic large-scale electronic-grade polysilicon production line under Xinhua Technology, the &#34;Xuzhou Production Line,&#34; was built based on the initial production line assets of GCL Group; in 2017, GCL Group's related parties even pledged land and property to provide crucial collateral for Xinhua Technology's 900 million yuan syndicated loan.
Thanks to the major shareholder's ten years of resource tilt, Xinhua Technology has gradually grown into a leading enterprise in the domestic electronic-grade polysilicon field. According to statistics from the Semiconductor Materials Branch of the China Electronic Materials Industry Association, Xinhua Technology's market share in high-purity electronic-grade polysilicon for integrated circuits in China exceeded 50% in 2024, ranking first.
However, just before the IPO, GCL Group chose to exit.
In September 2025, GCL Group transferred all its shares in Xinhua Technology, valued at 1.472 billion yuan, to Hefei Guocai No. 3 Private Equity Institution under the state-owned China National Building Material Group, which then became the largest shareholder
This is a reluctant exit.
Due to the drag of its main photovoltaic business, GCL-Poly Energy Holdings Limited is mired in losses, with a net loss of up to 4.75 billion yuan in 2024.
Under the immense pressure to &#34;survive,&#34; monetizing the already matured Xinhua Technology has become the optimal solution for GCL-Poly to quickly &#34;recover.&#34;
After divesting Xinhua Technology in September 2025, GCL-Poly's photovoltaic materials business profit in the third quarter of that year reached 960 million yuan, achieving a rare turnaround from the 1.81 billion yuan loss in the same period of 2024.
Another pressure is the bumpy road to listing for Xinhua Technology, which unexpectedly became a burden that consumed GCL-Poly's profits.
Xinfeng noticed that as early as 2016, when GCL-Poly was introducing external investors for Xinhua Technology, it signed a bet agreement with a repurchase clause: if Xinhua Technology fails to complete its IPO within the stipulated time, GCL-Poly must fulfill its repurchase obligation.
Unfortunately, Xinhua Technology's listing pace has repeatedly faltered, and after initiating guidance filing in 2022, the IPO has been stalled, forcing the final deadline of the bet agreement to be extended repeatedly, with the last supplementary agreement postponing the IPO grace period to the end of 2026.
The weak ability of the main business to generate cash flow, combined with the increasingly imminent potential repurchase pressure, ultimately prompted GCL-Poly to &#34;tearfully&#34; sell this semiconductor polysilicon asset.
However, Xinhua Technology was able to embark on the IPO path just six months after the major shareholder exited, thanks to its unique equity governance structure.
According to the relevant rules of the Sci-Tech Innovation Board, issuers must meet the rigid requirement that &#34;there has been no change in the actual controller in the last two years&#34; before applying for an IPO.
In the multiple rounds of financing over the past decade, GCL-Poly's shareholding ratio has been gradually diluted, from an initial 50.98% down to 24.55% before exiting, which allowed Xinhua Technology to form an &#34;entity without an actual controller&#34; equity structure early on.
In this context, merely the change of the largest shareholder did not trigger the regulatory red line of &#34;change of actual controller,&#34; thus preserving Xinhua Technology's qualification for rapid IPO application.
<h2>The Real Leverage Behind Expansion</h2>
Xinhua Technology mainly produces electronic-grade polysilicon for the semiconductor industry, which is the core raw material for producing semiconductor wafers.
What is advantageous is that Xinhua Technology fully covers various sizes of wafer applications, including 12-inch wafers.
Among them, 12-inch wafers are currently the most mainstream specifications in the market and are the main direction for global wafer factory expansion, accounting for over 75% of the total wafer shipment area worldwide in 2024, used in high-end integrated circuit products such as smartphones, tablets, and GPU/CPU.
Driven by the wave of AI, a surge in 12-inch wafer factory expansions is underway. SEMI predicts that by 2026, the number of 12-inch wafer factories in mainland China will exceed 70, with corresponding production capacity increasing to 3.21 million pieces per month.
The newly added capacity for 12-inch wafers will undoubtedly directly stimulate the release of corresponding silicon wafer demand.
However, compared to the continuously expanding wafer factories downstream, silicon materials are relatively scarce.
The purity requirements for 12-inch wafers are extremely stringent, needing to reach 11N (i.e., 99.999999999% or higher), with high technical barriers
Currently, the global electronic-grade polysilicon market is mainly dominated by a few companies such as Germany's Wacker, America's Hemlock, and Japan's Tokuyama, while in China, only Xinhua Technology can achieve large-scale stable supply of electronic-grade polysilicon in the 12-inch wafer field.
According to incomplete statistics, the annual production capacities of electronic-grade polysilicon for Wacker, Hemlock, and Tokuyama are approximately 15,000 to 20,000 tons, 10,000 tons, and 6,000 to 8,000 tons, respectively.
Currently, Xinhua Technology's electronic-grade polysilicon capacity has reached 18,000 tons per year, with production lines in Xuzhou and Inner Mongolia at 8,000 tons per year and 10,000 tons per year, respectively, with capacity approaching or even exceeding some international giants.
The rapid increase in capacity scale is accompanied by a high level of financial leverage. To promote the construction of the Inner Mongolia production line, Xinhua Technology's subsidiary, Inner Mongolia Xinhua, signed a fixed asset loan agreement with China Construction Bank in 2023 for up to 1 billion yuan, with a term of 7 years.
This has raised Xinhua Technology's overall debt level. Financial data shows that in the past three years, Xinhua Technology's consolidated debt-to-asset ratio has remained above 40%.
However, when demonstrating its debt repayment ability and financial structure in the prospectus, Xinhua Technology primarily cited the &#34;parent company&#34; debt-to-asset ratio.
The prospectus shows that from the end of 2022 to the end of September 2025, Xinhua Technology's parent company debt-to-asset ratios were 40.90%, 27.56%, 26.80%, and 25.25%, respectively.
Based on this metric, the company stated in the prospectus: &#34;The company's debt-to-asset ratio (parent company) continues to decline, mainly due to capital contributions received from shareholders and the gradual repayment of long-term bank loans.&#34;
When comparing with industry peers such as Shanghai Silicon Industry and Xi'an Yicai, Xinhua Technology also used parent company data to argue that its debt level is similar to that of its peers.
However, from an objective financial analysis perspective, the comparison based on parent company data has certain limitations.
Currently, Xinhua Technology's consolidated debt-to-asset ratio is nearly 15 percentage points higher than that of the parent company. The core reason for this significant difference is that Inner Mongolia Xinhua, which has taken on the new capacity of tens of thousands of tons, is not included in the parent company's financial statements.
&#34;When assessing the overall leverage and debt repayment risk of asset-heavy enterprises, if the debt data of core expansion subsidiaries is excluded, it is often difficult to fully reflect the true financial condition of the enterprise,&#34; pointed out a financial professional in Beijing.
The reasonableness of Xinhua Technology's use of parent company data for industry comparisons and the accuracy of its information disclosure are under scrutiny and may become the focus of subsequent regulatory inquiries

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